With distorted real estate perceptions, who is right? Who is wrong? Misled? Deceived?
When buying or selling a home in London, Ontario, you will encounter perceptions, beliefs, egos, greed, know-it-alls, and the unwashed!
“When two people believe opposite things, chances are that one of them is wrong” Ray Dalio.
It involves buyers and sellers, Realtors and sometimes home inspectors, appraisers, and lawyers.
Nonfiction Stories.
A home seller wants $850,000 for their house. The Realtor they choose or are related to says no problem. However, if the house is on the market for a long time or does not sell, it may be because home buyers and their Realtors believe the price is too high. Who is right?
Or, the home seller gets an offer for $775,000, and both the seller and their Realtor feel insulted at the low offer, while the Realtor and their buyer feel their offer is right. They go back and forth a few times, stubbornly negotiating the price or not knowing the market; neither the buyer nor the seller completes a transaction.
Or, the home seller who wants $850,000 for their house, and the Realtor they choose says no, the price range is $795,000-$815,000. The home seller says no, I will find a Realtor who will list at my price. Now, who is right, the home seller, the Realtor who says yes, or the one who says no?
Real Estate Perceptions or Ego!
A homeowner thinks the roof has ten years left before it needs to be replaced. One home inspector says three years. One buyer thinks six years. They get two roofing companies in to do quotes. One estimate is one year left on the roof and should be replaced immediately for $19,600. The other estimate is that the roof is in decent shape, with perhaps some caulking around the vents, skylights and flashing, and the roof should be good for another eight years. Who do you believe? In this case, the buyer wanted $20,000 off the price, but the seller said no, so back on the merry-go-round!
The mortgage company’s home appraiser doesn’t think the house is worth what the buyer and seller agreed upon. Hence, the lender will not fund the mortgage unless the buyer comes up with more of a down payment or the seller reduces the price. Who is right?
Two condos in a building sell within a month of each other. One lawyer reviews the status certificate and says, “OK,” yet a different lawyer reviews the status certificate and advises his clients to walk away. Who is right?
Is there a solution? No! If anyone tells you there is, is she or he right? This is how distorted real estate perceptions start.
I leave you with one of the most straightforward and concise opinions regarding money by Morgan Housel.
“Every decision people make with money is justified by taking the information they have at the moment and plugging it into their unique mental model of how the world works.
Those people can be misinformed. They can have incomplete information, be bad at math, be persuaded by marketing, or misjudge the consequences of their actions.
Every financial decision a person makes makes sense to them in that moment and checks the boxes they need to check.”
So, at the end of the day, results don’t lie!
“It’s what you learn after you know it all that counts!” John Wooden